Water scarcity could pose a serious risk to SABMiller and the surrounding communities and ecosystems where it operates. To address it, the brewer is working towards reducing its water consumption by 25% per hectolitre of beer. It is also joining forces with other organisations to promote sustainable water management.
Research shows that competing demands for scarce water resources over the coming years could result in a 40% gap emerging between water supply and demand by 2030.
This makes it a pressing issue for the brewer SABMiller, which naturally depends on water to produce its beer. As well as being a vital component of beer, water is also required to cultivate the crops used to produce it.
As water scarcity becomes more apparent so do the potential risks. These include competition for resources, higher costs, reduced water quality and the possibility that shortages will limit production.
More often than not, risks are shared with the local community, generating a set of secondary risks such as tensions over the allocation of water. This in turn can create reputational risks for industrial water users, even if the amount of water they’re using is proportionally small.
To manage these risks, SABMiller set itself stretching targets to reduce its water consumption, aiming to cut water use by 25% per hectolitre of beer brewed between 2008 and 2015. But the company recognises that acting alone isn’t enough.
That’s why SABMiller works alongside local communities to protect the watersheds they share and on which they each depend. The company also collaborates with NGOs, governments, communities and industry coalitions to take an active role in the water debate, share lessons learned and encourage better water stewardship.
“SABMiller edged this category because of their efforts to cut water usage and address issues up the supply chain,” said the Guardian judging panel.
In 2009 SABMiller joined forces with WWF and German development agency GIZto form the Water Futures partnership in order to address some of the most pressing waters risks facing its local businesses, surrounding communities and ecosystems.
The aim of Water Futures is to prove the business case for private sector engagement in promoting the sustainable management of water resources.
Over the past two years the partnership has worked with local stakeholders to assess and address the water risks in Peru, South Africa, Tanzania and Ukraine. Recently, the partnership expanded to include Colombia, Honduras, India and the US.
Several projects are under way. In Peru, the company’s business is funding conservation projects in the Lima basins through Aquafondo, which was set up by The Nature Conservancy. These include improvements to ecological infrastructure and rehabilitation; and conservation and water protection measures. Work has also started on identifying all stakeholders in the watershed.
Another partnership with The Nature Conservancy was established in Colombia to improve the quality of drinking water in Bogotá and the condition of the ecosystem, in particular preventing excess sediment entering the rivers that feed the water basin. For instance, ranching families receive grants to switch to ecologically sustainable farming methods, and other support if they commit to long-term conservation agreements.
In South Africa, a water risk assessment of hop farms found that if non-native trees continued to grow unchecked they would reduce surface water to farms by 780,000m3 a year. Work is now being planned to remove these alien species from the region and replace them with indigenous vegetation that is less water-intensive. SABMiller is also working with the local authorities in Polokwane to rehabilitate the struggling effluent treatment system for the entire town.
Other schemes include the setting up of a business water users’ association in Dar es Salaam to tackle risks such as improving the quality of agricultural water, both upstream and downstream; and a programme to protect the water supply for SABMiller’s brewery and local farmers in water-stressed Rajasthan.
This involved funding the construction of four water recharge dams to prevent the excessive run-off of water and encourage the natural replenishment of groundwater. Groundwater is estimated to have risen by 31 feet so far, almost as much water as the brewery extracted last year.
SABMiller has also taken a lead in several cross-industry groups. The company is a founding signatory of the UN CEO Water Mandate, an initiative that helps companies develop, implement and disclose water sustainability policies and practices.
Through organisations such as the World Economic Forum, SABMiller has taken the water debate to ministers of finance, energy and trade, demonstrating the inextricable link between water, food and energy resources that could threaten the wellbeing of billions of people. The company is also working to address this challenge through the Water Resources Group.
It’s by addressing issues on the international stage and at a very local level that SABMiller is managing to protect the watersheds on which its business and the livelihoods of many communities depend.